A report from the University of Michigan revealed the preliminary reading for the Reuters/Michigan index of consumer sentiment rose to 95.5 in early February. Economists had expected the index would increase to 94.5 this month from January’s final reading of 91.2.
The early February gains reflected the end of the partial government shutdown as well as a more fundamental shift in consumer expectations due to the Fed's pause in raising interest rates, the report said.
According to the report, the index of current U.S. economic conditions rose to 110.0 in February from 108.8 in the previous month. Meanwhile, the index of consumer expectations climbed to 86.2 this month from 79.9 in January.
The Federal Reserve reported that the U.S. industrial production fell 0.6 percent m-o-m in January 2019, following a downwardly revised 0.1 percent m-o-m increase in December 2018 (originally a 0.3 percent m-o-m advance). It was the first decline since May 2018.
Economists had forecast industrial production would rise 0.1 percent m-o-m in January.
According to the report, manufacturing production dropped 0.9 percent m-o-m, primarily due to a large decline in motor vehicle assemblies. Meanwhile, the indexes for mining and utilities increased 0.1 percent m-o-m and 0.4 percent m-o-m, respectively.
Capacity utilization for the industrial sector decreased 0.6 percentage point m-o-m in January to 78.2 percent. That was 0.5 percentage points below economists’ forecast and 1.6 percentage points below its long-run (1972–2018) average.
In y-o-y terms, the industrial output rose 3.8 percent in January, following an upwardly revised 4.1 percent surge in the prior month (originally a 4.0 percent gain). That marked the slowest rate of growth in industrial production recorded since June 2018.
U.S. stock-index rose on Friday, as the U.S.-China trade talks between progressed, although concerns of a cooling domestic economy kept a lid on gains.
Today's Change, points
Today's Change, %
(company / ticker / price / change ($/%) / volume)
ALTRIA GROUP INC.
Amazon.com Inc., NASDAQ
AMERICAN INTERNATIONAL GROUP
Cisco Systems Inc
Citigroup Inc., NYSE
Deere & Company, NYSE
Exxon Mobil Corp
FedEx Corporation, NYSE
Freeport-McMoRan Copper & Gold Inc., NYSE
General Electric Co
General Motors Company, NYSE
Home Depot Inc
International Business Machines Co...
International Paper Company
Johnson & Johnson
JPMorgan Chase and Co
Merck & Co Inc
Procter & Gamble Co
Starbucks Corporation, NASDAQ
Tesla Motors, Inc., NASDAQ
The Coca-Cola Co
Twitter, Inc., NYSE
Wal-Mart Stores Inc
Walt Disney Co
Yandex N.V., NASDAQ
The Labor Department reported the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, fell 0.5 percent m-o-m in January 2019, following an unrevised 1.0-percent m-o-m decrease in December 2018. Economists had expected prices to drop 0.1 percent m-o-m last month.
According to the report, import fuel prices decreased 3.2 percent m-o-m in January, primarily driven by a 44.2-percent m-o-m tumble in natural gas prices, while petroleum prices edged down 0.1 percent m-o-m. The price index for nonfuel imports declined 0.2 percent m-o-o in January, weighed down by falling prices for nonfuel industrial supplies and materials consumer goods, automotive vehicles and foods, feeds, and beverages which more than offset higher prices for capital goods.
Over the 12-month period ended in January, import prices dropped 1.7 percent, recording the largest over-the-year decline since the index fell 2.2 percent in August 2016.
At the same time, the price index for U.S. exports declined 0.6 percent m-o-m in January, the same pace as in the previous month. Export prices have only recorded one monthly gain since June.
Both nonagricultural prices (-0.3 percent m-o-m) and agricultural prices (-2.1 percent m-o-m) contributed to the January decline.
Over the past year, the price index for exports edged down 0.2 percent last month, recording the first 12-month drop since the index fell 0.2 percent in November 2016.
American Intl (AIG) upgraded to Buy from Neutral at Compass Point; target $56
American Intl (AIG) downgraded to Hold from Buy at Argus
Barrick (GOLD) downgraded to Hold from Buy at TD Securities
Barrick (GOLD) downgraded to Hold from Buy at Deutsche Bank; target $12.75
Coca-Cola (KO) downgraded to Neutral from Buy at Citigroup; target $50
Yandex N.V. (YNDX) reported Q4 FY 2018 earnings of RUB20.95 per share (versus RUB15.85 in Q4 FY 2017), missing analysts’ consensus estimate of RUB23.46.
The company’s quarterly revenues amounted to RUB38.842 bln (+39.4% y/y), beating analysts’ consensus estimate of RUB37.445 bln.
YNDX rose to $34.50 (+0.26%) in pre-market trading.
Deere (DE) reported Q4 FY 2018 earnings of $1.54 per share (versus $1.31 in Q4 FY 2017), missing analysts’ consensus estimate of $1.76.
The company’s quarterly revenues amounted to $6.941bln (+16.2% y/y), beating analysts’ consensus estimate of $6.829 bln.
The company issued in-line guidance for FY 2019, projecting revenues of approximately 7% to approximately $35.7 bln versus analysts’ consensus estimate of $35.69 bln.
DE closed Thursday's trading session at $162.42 (-0.17%).
A fresh Brexit talks between the UK Brexit Secretary Stephen Barclay and the European Union's Brexit negotiator Michel Barnier are planned for Monday in Brussels, a BBC reporter said in a tweet on Friday.
Britain’s Department for Exiting the EU declined to comment.
Made new progress in important issues during trade talks
Willing to solve economic and trade dispute with US via cooperation
Trade negotiations with US will continue in Washington next week
Hopes both sides can reach mutually beneficial agreement
Hopes US and China can strengthen communication and control disputes
Study by the German Ifo institute showed, proposed 25% import tariffs on cars by the United States could cut German car exports to the U.S. by up to 50% in the long-term and heavily affect exports to other countries.
“These tariffs would cut total car exports from Germany by 7.7%, which would amount to 18.4 billion euros,” Gabriel Felbermayr, foreign trade expert at Ifo, said.
According to the first estimate from Eurostat, euro area (EA19) exports of goods to the rest of the world in December 2018 was €176.5 billion, a decrease of 2.5% compared with December 2017 (€181.0 bn). Imports from the rest of the world stood at €159.5 bn, a rise of 1.9% compared with December 2017 (€156.5 bn). As a result, the euro area recorded a €17.0 bn surplus in trade in goods with the rest of the world in December 2018, compared with +€24.5 bn in December 2017. Intra-euro area trade fell to €142.6 bn in December 2018, down by 1.2% compared with December 2017.
In January to December 2018, euro area exports of goods to the rest of the world rose to €2 276.3 bn (an increase of 3.7% compared with January-December 2017), and imports rose to €2 082.1 bn (an increase of 6.2% compared with January-December 2017). As a result the euro area recorded a surplus of €194.2 bn, compared with +€234.9 bn in January-December 2017. Intra-euro area trade rose to €1 941.9 bn in January-December 2018, up by 5.2% compared with January-December 2017.
According to the report, claims that progress was made but 'not enough to seal a deal to end the trade war' and talks will continue next week among the 'same group of people'.
According to the report from Office for National Statistics, in the three months to January 2019, the quantity bought increased by 0.7% when compared with the previous three months.
The monthly growth rate in the quantity bought increased by 1.0% in January 2019, following a decline of 0.7% in December 2018. Economists had expected a 0.2% increase
Year-on-year growth in the quantity bought in January 2019 was 4.2% - the highest since December 2016 and more than the 3.4% rise economists had a forecast - while year-on-year average store prices slowed to 0.4%, the lowest price increase since November 2016.
The quantity bought in textile, clothing and footwear stores showed strong year-on-year growth at 5.5% as stores took advantage of the January sales, with a year-on-year price fall of 0.9%.
As food store prices experienced a general slowdown throughout 2018, the quantity bought in January 2019 returned to the strong growth experienced in the summer months at 3.2%. Online sales as a total of all retailing decreased to 18.8% in January 2019, from the 19.8% reported in December 2018.
According to the report from Istat, in December 2018, compared with the same month of the previous year, exports decreased (-2.7%) and imports raised (+1.4%). Outgoing flows drop by 5.1 for non EU countries and by 0.3 for EU countries. Incoming flows rose by 8.1% for non EU area and declined by 2.7% for EU area.
The trade balance in December amounted to +3,658 million Euros (+4,270 million Euros for non EU area and -613 million Euros for EU countries), compared with +3,847 million Euros in November. A trade surplus was expected to drop to +3,47 million Euros.
In December 2018 the total import prices index decreased by 1.6% compared to the previous month (the index decreased for the euro zone by 0.3 and by 3.0% for the non-euro zone); the total twelve-month rate of change increased by 3.0% (respectively increased by 1.1% for the euro zone and by 4.8% for the non-euro zone).
According to data released by the People’s Bank of China (PBOC). chinese banks extended a record 3.23 trillion yuan in net new yuan loans in January, eclipsing the last high of 2.9 trillion yuan in January 2018. Analysts had predicted new yuan loans of 2.9 trillion yuan last month, up from 1.08 trillion yuan of new loans in December.
Demand for credit picked up sharply in the corporate sector, followed by the household sector. Corporate loans jumped to 2.58 trillion yuan from 473.3 billion yuan in December, while household loans rose to 989.8 billion yuan from 450.4 billion yuan. Corporate loans accounted for 80 percent of new loans in January, up sharply from 44 percent in December.
Several other key credit gauges also picked up modestly in response to the PBOC’s recent shift to policy easing. Broad M2 money supply grew 8.4 percent in January from a year earlier, compared with 8.1 percent in December. Outstanding yuan loans grew 13.4 percent from a year earlier, easing from December’s rise of 13.5 percent.
Government defeat was more of a hiccup than a disaster
EU does know what UK wants on Irish Backstop
Government is determined to keep No-Deal Brexit on table
Confident that parliament will support UK PM May’s Brexit deal
It would not make sense for the EU to refuse to negotiate
According to the report from National statistical institute (INE), the annual variation rate of the CPI in the month of January is 1.0%, two tenths less than that registered the previous month.
The annual rate of core inflation decreases by one tenth to 0.8%.
The monthly variation of the general index is -1.3%.
The Harmonized Index of Consumer Prices (HICP) puts its annual rate at 1.0%, decreasing by two tenths with respect to the month of December.
The groups with negative influence that stand out in the decrease of the annual rate are:
Food and non-alcoholic beverages, which decreased by four tenths of an annual change and stood at 0.9%, due to the stability of fish and seafood prices, compared to the rise registered in 2018. It should also be noted, although in the opposite direction, the increase in the prices of vegetables, which decreased last year.
Transportation, with a rate of -0.2%, four tenths lower than the previous month, as a result of which the prices of fuels and lubricants rise this month less than in January 2018.
Leisure and culture, whose annual variation decreases eight tenths, down to -0.9%, due to the decrease in the prices of tourist packages is higher this month than in January of the previous year.
According to the report from European Automobile Manufacturers' Association (ACEA). in January 2019, the European passenger car market saw a slow start to the year, posting a 4.6% decline compared to one year ago. Nevertheless, with nearly 1.2 million units registered in total, this still represents the second-highest January volume on record since 2009.
Demand for new cars fell across almost the entire European Union, including the EU’s five major markets. Spain and Italy posted the strongest declines (down 8.0% and 7.5% respectively), while percentage drops were more modest in the United Kingdom (-1.6%), Germany (-1.4%) and France (-1.1%).
Goldman said it saw the probability of a no-deal exit at 15% and the probability of no Brexit at around 35%.
"There does exist a majority in the House of Commons willing to avoid a 'no deal' Brexit (if called upon to do so), but there does not yet exist a majority in the House of Commons willing to support a second referendum (at least at this stage)," Goldman said.
"The prime minister will repeatedly try to defer the definitive parliamentary vote on her negotiated Brexit deal, and the intensification of tail risks will continue to play a role in incentivising the eventual ratification of that deal." Goldman added.
Markets have lowered their bar for what kind of U.S.-China trade headlines they'd cheer, a J.P. Morgan Asset Management global market strategist, Hannah Anderson, said.
"I believe we have seen expectations move from assuming China and the U.S. will resolve their differences during this 90-day negotiating period to assuming that talks would be a success if the U.S. doesn't raise or apply more tariffs on March 1," she said.
"This shift reflects how easy it would be for policymakers to move the goalpost and declare victory - and how eager markets, fatigued after a year of trade headlines, are to move trade issues to the back burner," Anderson added.
The National Bureau of Statistics said, consumer inflation eased in January from December to a 12-month low due to slower gains in food prices.
Consumer prices were up 1.7% on year in January That was shy of expectations for an increase of 1.9%, which would have been unchanged from the December reading. The food price index in January rose 1.9% from a year earlier, down from December's reading of 2.5%. The moderation in food prices breaks the historic pattern of acceleration that typically precedes the week-long Lunar New Year, which came in the first week of February this year.
On a monthly basis, consumer prices were up 0.5% following the flat reading in December.
Meanwhile, factory-gate inflation slowed for a seventh straight month in January to its weakest pace since September 2016
Producer prices were up 0.1% on year, shy of expectations for an increase of 0.2% and down from 0.9% in the previous month. On a monthly basis, producer prices have already been falling over the past three months. In December, PPI fell 0.6%, moderating from a 1% decrease in December.
Data showed prices for raw materials fell in January for the first time in over two years, swinging from an 0.8% rise in December. Price rises in the production sector also turned negative.
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.1285
Support levels (open interest**, contracts):
- Overall open interest on the CALL options and PUT options with the expiration date March, 8 is 99698 contracts (according to data from February, 14) with the maximum number of contracts with strike price $1,1700 (6265);
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.2805
Support levels (open interest**, contracts):
- Overall open interest on the CALL options with the expiration date March, 8 is 41965 contracts, with the maximum number of contracts with strike price $1,3000 (3980);
- Overall open interest on the PUT options with the expiration date March, 8 is 29516 contracts, with the maximum number of contracts with strike price $1,2700 (1849);
- The ratio of PUT/CALL was 0.70 versus 0.69 from the previous trading day according to data from February, 14
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
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